Ten Key Messages for
Effective Policy Packages
Sharing best practices in industrial energy
efficiency policies
Sharing best practices
for the low carbon future
iipnetwork.org
Ten Key Messages for Effective Policy
Packages
Sharing best practices in industrial energy efficiency policies
Authored by:
Julia Reinaud, IIP
Amélie Goldberg, IIP
Based on research carried out by D. Phylipsen, M. Harmelink, M. Voogt, M. van Wees, L. Price, and A. de Lamar.
June 2011
© Institue for Industrial Productivity, 2012. No reproduction, translation or other use of this publication, or any portion thereof, may be made without prior written permission.
Institute for Industrial Productivity
Promoting Energy Savings and GHG Mitigation Through Industrial Supply Chain Initiatives
The Institute for Industrial Productivity (IIP) provides companies
and governments with the best energy efficiency practices to
reduce energy costs and prepare for a low carbon future. Our global
team and independent experts offer an integrated service package
comprising technology, policy and financing components.
We are the partner of choice for companies and governments—whether the need
is best practice information or a tailored approach to implementing an initiative.
The Institute for Industrial Productivity works across the globe with a near-term focus on China, India, and
the USA to ensure industrial stakeholders have access to the most effective energy efficiency technology,
policy and financing approaches. We do this by:
sharing best practices and providing access to a network of international experts;
ll developing original research, analysis and databases; and
ll bridging the gap between government policy and industry implementation.
ll Companies, industry associations and governments can leverage our expertise to
achieve their goals.
Many companies, industry associations, and governments are aware that increasing energy efficiency cuts
costs and helps achieve sustainable economic growth, and they establish goals to boost energy productivity.
The Institute for Industrial Productivity helps these organizations understand which technologies, policies and
financing options will help them achieve their vision. Our integrated technology, policy and financing model
and our broad network of experts makes us the partner of choice for governments, and companies that share
our goal of competitive industries through a low carbon future. The Institute for Industrial Productivity is a
nonprofit organization independently funded by the ClimateWorks Foundation, serving as its Best Practice
Network partner for the industrial sector.
3
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Table of Contents
Foreword
4
Executive Summary
4
Introduction and objectives
4
Approach and methodology
The policy pyramid
Drivers, barriers and policy responses
7
7
7
Country analyses
China
India
Japan
Netherlands
United Kingdom
United States (Federal)
9
7
7
7
7
7
7
9
7
7
7
7
7
7
7
7
Comparison of the policy packages of the six countries
The role of effort-defining policies
The choice of effort-defining policies
Combinations of effort-defining policies
Setting ambition levels
The role of supporting measures
Implementation toolbox
Monitoring, reporting and verification; compliance and enforcement
Ex-post evaluation
Conclusions
Key Messages
9
7
References
34
4
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
List of Figures & Tables
Table 1 Typical circumstances in which to apply different types of instruments
15
Table 2 Different elements of targets and standards*
44
Table 3 Combinations of targets and standards according to the scope of each instrument
45
Table 4 Examples of supporting measures addressing specific barriers
50
Figure 1 Example of a policy pyramid
12
Figure 2 China's policy package (main initiatives, not all are included)
21
Figure 3 India's policy package
24
Figure 4 Japan's policy package
26
Figure 5 The Netherlands' policy package
30
Figure 6 The United Kingdom's policy package
33
Figure 7 Federal policy package of the United States.
37
Figure 8 Relationship between targets and standards
43
5
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Executive Summary
goals; (ii) supporting measures (i.e. in the form of carrots and
sticks) that address the different
This paper analyses the policy packages of China, India, Japan,
the Netherlands, the United Kingdom and the United States
that directly or indirectly affect industrial energy efficiency or
greenhouse gas (GHG) emissions. The aim is to identify best
practices and key messages that can inform the development of
energy efficiency and GHG policies.
barriers (if any barriers have been identified) and that are
mutually reinforcing and encourage action; and (iii) an
implementation toolbox to support the execution of effortdefining policies and supporting measures in a transparent and
efficient way.
To explore whether policy packages can provide the necessary
impetus to achieve ambitious improvements in energy savings
and emissions reductions, the paper uses the “policy pyramid”
methodology (illustrated below), which distinguishes among
three levels of policy making: effort-defining policies; supporting
measures (or complementary policies, either carrots or sticks)
that help deliver that effort and address specific barriers
identified; and tools, guidelines or mechanisms that help define
and establish the policy implementation framework. This paper
posits that an effective policy approach requires a policy package
consisting of all three policy levels.
The analysis of the policy packages of the countries surveyed
(China, India, Japan, Netherlands, United Kingdom and United
States) and other analysis drawn from the literature highlight
certain experiences that could be of interest to other countries.
These experiences include:
China’s minimum energy efficiency standards for industrial
processes and energy efficiency appraisals for new large
industrial projects;
ll The negotiated agreements in the Netherlands and the
United Kingdom, supported by a levy or tax in case of
nonparticipation or noncompliance, energy management
guidance to help achieve stated goals, and financial
incentives;
ll Effort-defining Policies
Mandatory targets (with or without trading)
Negotiated agreements
Voluntary targets
Minimum energy norms and standards
The concept of benchmarking (comparing one’s business
performance to that of peers) to define energy efficiency
targets among companies, used in the Dutch-negotiated
agreements and Phase 3 of the EU Emissions Trading System
(ETS), and now being developed in India and Japan;
Supporting Measures
ll Financial incentives / disincentives
Energy management programmes (& audits)
Equipment standards
Implementation Toolbox
Energy management and audit protocols
Benchmarking manuals
Technology lists
Networking, workshops, training etc...
A well-developed implementation toolbox, as in Japan, the
United States, the United Kingdom and the Netherlands to
help companies understand the challenges and opportunities
available to them to manage and reduce energy use and
GHG emissions; and India’s Perform Achieve Trade scheme,
an energy-savings trading (i.e. white certificates) scheme
between energy-intensive enterprises, and the first scheme of
its kind for industry.
ll Although a range of context-specific factors affect policy
effectiveness within a country, the policy pyramid is a means by
which to analyse the policy approaches of different countries,
and to assess whether certain minimum elements critical to the
success of a policy package have been considered.
The following ten key messages on how to design effective
policies and policy packages and how to evaluate the
effectiveness of existing policy packages are based on the
analysis, including a literature review, provided in this paper:
This paper proposes that an effective policy approach requires a
policy package consisting of: (i) sufficiently ambitious effortdefining policies to outline energy efficiency and GHG reduction
6
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Message 6: Where barriers to energy savings have been
identified, supporting measures (in the form of carrots or
sticks) are often needed to support effort-defining policies and
encourage action. The choice and design of these supporting
measures depend on the specific barriers of the country and
sector, their interaction with other policies, and the political and
cultural characteristics of the country in which the supporting
measures are being developed.
Message 1: As governments define their policy package to
support their energy efficiency and climate mitigation goals,
they need to start by defining the overall energy efficiency or
emission reduction ambition levels through an effort-defining
policy. As such, what matters is not the quantity of effortdefining policies but their quality and scope.
Message 2: Mandatory targets, such as cap-and-trade and
white certificates schemes, negotiated agreements (when
these are supported by rewards for participation or the threat
of regulation), and industrial product/process standards can be
viable effort-defining policies to encourage energy savings and
GHG reductions.
Message 7: Energy management programmes, if cohesively
linked to effort-defining policies and supported by training
and incentives, can be very effective as supporting measures.
Experience in European countries has shown that such
programmes can usefully contribute to enhanced energysavings performance, facilitate company achievement of effortdefining policies and ease the burden of compliance checks on
the government.
Message 3: As effort-defining policies, targets and standards
can be effective in combination with each other provided
that they differ in scope (e.g. according to system boundary,
participant definition, sectoral scope, primary objective etc.).
In a combined application of targets and standards, minimum
efficiency standards would work on the bottom-end of the
market (in terms of efficiency) to establish a floor, while targets
can go beyond these actions and aim for higher ambition levels.
Message 8: A comprehensive implementation toolbox is
needed to support the implementation and achievement of
effort-defining policies and supporting measures. An ideal
situation is one where a country sets an effort-defining policy,
and simultaneously, or quickly thereafter, develops a set
of supporting measures and an implementation toolbox to
facilitate the implementation of both policies and measures. In
some cases, tools and guidelines can be developed first and can
then form part of the implementation toolbox once policies and
measures have been established.
Message 4: To define ambitious energy efficiency or GHG
goals, governments, industry representatives and third-party
experts should be involved in the design and negotiation
process. Experience has shown that the hiring of thirdparty sector experts allows governments to negotiate more
ambitious targets than would otherwise have been the case. A
consultative process can also support more ambitious targets.
Message 9: A transparent monitoring, reporting and verification
process is needed to assess the effectiveness of the policy,
allow ongoing evaluation and possible adjustment of the policy,
and build trust.
Message 5: Although the use of aggregated-level data can
be challenging in setting ambitious differentiated targets, the
inability to improve on this data immediately should not be
a reason for delaying action. At the start of a scheme, policy
makers need to ensure that the data collection requirements
become more detailed through time. As governments become
capable of collecting granular process-level data, targets can
be fine-tuned over time to ensure ambitious efforts while
maintaining the visibility of prices, policy decisions and the rules
of the scheme to provide long-term certainty for investors.
Message 10: As policy makers define policies, governments
need to identify, from the start, the parameters and indicators
that will be monitored to allow ongoing and ex-post evaluations.
Policy efficiency and free riding should be assessed, in addition
to effectiveness, in ex-post policy evaluation to ensure that the
policy is achieving the desired goals at lowest costs to society
and the target group.
7
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Introduction and objectives
Energy efficiency is widely considered to be an important and
often low-cost option to reduce GHG emissions. It also offers
many other advantages (such as reducing energy costs and
improving competitiveness, improving access to energy and
security of supply, and reducing local air pollutants) and often
brings a range of process improvements. These significant
benefits and co-benefits make improving energy efficiency,
in many cases, a no-regrets strategy, especially in developing
countries, where such issues can hinder development.
Figure 1: Example of a policy pyramid
Effort-defining Policies
Mandatory targets (with or without trading)
Negotiated agreements
Voluntary targets
Minimum energy norms and standards
Supporting Measures
Financial incentives / disincentives
Energy management programmes (& audits)
Equipment standards
Implementation Toolbox
Energy management and audit protocols
Benchmarking manuals
Technology lists
Networking, workshops, training etc...
Industry accounts for about a third of the world’s final energy
consumption. Substantial energy efficiency improvement
potentials still exist within this sector, on the order of 31 EJ
a year, equivalent to 26% of final industrial energy demand
(IEA, 2009; UNIDO, 2010). However, various barriers to energy
savings exist, preventing companies from changing their
practices and making the necessary investments. Therefore,
industrial energy efficiency policies have an important role to
play in removing or reducing these barriers and in encouraging
action.
Identify and improve the sharing of best practices and key
messages in the development of energy efficiency and GHG
policies.
ll The current paper shares some of the initial key messages from
analysing six countries (China, India, Japan, the Netherlands,
the United Kingdom and the United States 1) that could inform
the design of effective policy packages and policies in other
countries.
The objectives of this paper are to:
Describe the policy packages of individual countries using a
“policy pyramid” methodology;
ll While this paper highlights the policy packages and discusses
some key messages, the online Industrial Efficiency Policy
Database (iepd.iipnetwork.org) provides in-depth descriptions
of policies and can enable further research to explore policy
mixes.
Explore the effectiveness of policy packages and whether
individual policies are mutually reinforcing; and
ll 1 Federal policies only.
8
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Approach and methodology
This section describes the methodology and approach used to
deliver the relevant contents to the Industrial Efficiency Policy
Database. The policy pyramid methodology, described below,
aims to illustrate that a policy package approach is usually
more effective in assessing policy effectiveness than assessing
individual policies in isolation.
The policy pyramid can help in analysing the policy package of a
given country, especially regarding completeness (does the policy
framework adequately address all relevant barriers by using the
three parts of policy framework represented by the three levels?)
and internal consistency (do the supporting measures comply
with the overall approach of the effort-defining policies?). It also
facilitates cross-country comparisons and sharing of lessons
learned across countries.
The policy pyramid
We propose that, in order to achieve ambitious energy savings
and GHG emissions reduction goals, an effective policy
approach requires multiple policies that are mutually reinforcing.
Drivers, barriers and policy responses
The policy pyramid serves as an important method to analyse
the effectiveness of a country’s policy package. Policies are
needed where barriers to energy savings exist. Barriers refer to
all obstacles that prevent financially and technically feasible
energy efficiency measures from being implemented (IPCC,
2001).
These multiple policies can be analysed through a policy
framework that distinguishes among three policy levels: effortdefining policies that define the required effort, supporting
measures that help deliver that effort; and tools or guidelines
that define and establish a policy implementation framework
and help companies implement policies in a transparent,
uniform and efficient way:
Governments can implement different types of policy
instruments to reduce or remove these barriers. For
governments to make the right policy decisions in this regard,
they need to have good insight into:
Effort-defining policies in each country are those government
interventions that drive reductions in energy consumption
(and/or GHG emissions) across sectors, in addition to
existing market incentives.
ll The type and magnitude of the barriers that exist in the
various sectors;
ll Supporting measures are carrot-and-stick policies that
encourage action and address or alleviate certain countryor sector-specific barriers to efficiency improvements,
including financial, technical, information and/or research
and development barriers. They are needed to increase the
effectiveness of the effort-defining policies and, as such,
should be consistent with the direction of the effort-defining
policies.
The drivers for actors to implement energy efficiency
measures; and
ll ll The effectiveness of various policies to overcome these
barriers.
ll There is an extensive body of empirical evidence on the
existence of barriers, providing insights into the drivers
for implementing energy efficiency measures. A survey of
this literature (Rohdina et al., 2007; de Groot et al., 2001;
Masselink, 2008; de Beer et al., 2000; Anderson and Newell,
2004; Harmelink et al., 2010; Tanaka, unpublished 2009)
reveals the following:
Implementation toolbox (supporting mechanisms, guidelines,
tools and templates) include a wide variety of often generic/
cross-cutting, or smaller measures that help define and
establish the implementation framework. They support one
or more of the above policies.
ll Important financial barriers include:
The above framework is illustrated in a policy pyramid in Figure 1.
Investments in energy efficiency projects do not meet
ll 9
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
financial criteria within companies;2
ll Compliance with current policies and regulations;
Companies lack access to capital; and
ll ll
Investments impose too high a financial risk.
ll Important information and institutional barriers include:
ll Public pressure and company image;
ll
Pursuit of a long-term strategy towards greener image;
Other co-benefits such as improved product quality and
reduced waste products.
Companies lack knowledge of how energy is managed within
their operations and of the actual costs and benefits of
implementing energy options;
ll
The above overview illustrates that the barriers and drivers
are very diverse and that a sweep of policies may be needed
to alleviate them (i.e. one policy cannot address all barriers). A
separate paper prepared jointly by the Institute for Industrial
Productivity and the International Energy Agency, titled Drivers
for industrial efficiency investments and interaction with policy
packages, explores these drivers and the way in which policies
can influence boardroom decision-making.
Energy efficiency improvement is not a major driver for most
companies; instead companies focus on their core activity
such as production expansion or improvement;
ll
Energy efficiency is not treated as a separate investment
decision.
ll
A broader understanding of barriers can also be explained
through behavioural economics and sociological perspectives. For
example, “bounded rationality” posits that decision-making is
limited by factors such as insufficient time, attention, resources
and ability to process information. Similarly, attitudes, power
relations and culture can also be reasons why economically
rational decisions are not taken (Crittenden et al., 2011).
The literature listed above also reveals that the relative
importance of barriers differs between companies, sectors and
countries. Therefore, “best practice policies” per se cannot
be specifically defined. Which policy approach and policy mix
works best depends on the specific barriers and drivers within
a country and sector, as well as on how much effort has already
been spent on energy efficiency improvements in the past.
On the other hand, numerous drivers also exist for companies to
invest in energy efficiency projects. Some important drivers for
companies include:
Although “best practice policies” vary according to context and
national circumstances, one can identify specific practices and
processes to select the most appropriate policy instruments
and to put in place the conditions for their successful
implementation. Table 1 explores in which circumstances (i.e.
existing barriers and drivers) different policies are likely to have
the greatest chance of success and the policy characteristics
that can further enhance the success rate of policies.
Improving productivity, realising cost reductions;
ll
3
International competition;
ll
Availability of financial support for investments in energy
efficiency;
ll
2 As noted by UNIDO (2010), in some sectors, high capital cost of investment in new and efficient plants or equipment is a major limitation on the rate of
energy efficiency improvement in industry. This limitation is particularly the case
in countries where the economy is unstable, and where interest rates are high.
3 This driver can include cost reductions due to material efficiency, labor
efficiency, improved product quality, reduced waste, increases in production,
decreases in product reject rates, reduced maintenance and operating costs,
improved working environment, decreased liability, delaying or reducing capital
expenditures (IPCC 2007 Fourth Assessment Report; industry chapter). These
are often referred to as nonenergy benefits (NEBs).
10
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
TABLE 1: Typical circumstances in which to apply different types of instruments
Type of instrument
Energy performance
standards for buildings,
appliances, equipment,
or production process
Typical circumstances in which
to apply this instrument
Characteristics that typically determine the success
Is the standard well justified? (e.g. through life-cycle cost
studies)
When dealing with a target
group that is:
ll ll unwilling to act (e.g. voluntary
agreement of producers not
fulfilled)
Is the target group well prepared for the standard? (e.g.
through information campaigns, demonstration projects,
feasibility studies, training programmes etc.
ll ll difficult to address (e.g.
landlord-tenant problem)
Is the target group sufficiently skilled to apply the
standard?
ll ll When aiming at removing
the most energy-consuming
products, services, or production
facilities from the market
ll Is the target group resistant to the standard’s
application?
ll Are sufficient resources (knowledge, capacity, time,
budget, priority) in place to enforce the legislation?
ll Are penalties in place for noncompliance?
ll Are penalties at sufficiently high level to stimulate
meeting standards?
ll Is the standard timely adjusted to technology progress?
ll Mandatory targets,
tradable certificates for
energy savings or GHG
emissions
When aiming at energy savings
in a broad range of sectors
Is the target clearly set beyond business-as-usual?
ll ll Are measurement and verification of savings possible
at low cost, e.g. by standardization of energy-saving
measures?
ll When knowledge, financial and
institutional barriers play a role.
ll When governments want
certainty on the outcome
of their energy efficiency or
emissions goals
Is the cost-recovery mechanism (energy companies’
costs passed to end-users) clear and transparent?
ll ll Are there penalties in case of noncompliance (or are other
incentives in place to prevent noncompliance)?
ll When trying to regulate a
diverse (and heterogeneous)
number of emitters
ll Are penalties set at such a level that target achievement
is stimulated?
ll Are financial incentives needed to stimulate companies to
implement energy efficiency measures
ll Is the market for tradable certificates transparent, reliable
and liquid?
ll Is there undesired overlap with other instruments?
ll 11
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
TABLE 1 (CONT): Typical circumstances in which to apply different types of instruments
Type of instrument
Voluntary or negotiated
agreements
Typical circumstances in which
to apply this instrument
Characteristics that typically determine the success
Can the goals of the agreement be negotiated between
equally footed partners?
Early in the country and target
group’s experience in the policy
issue
ll
ll Does the target group have enough information on what
technologies and practices it can employ?
ll
Political challenge to impose
mandatory targets
ll Are goals clearly set beyond business as usual?
ll
Are third-party experts involved in the negotiation of targets?
ll
Are financial incentives needed to stimulate companies to
implement energy efficiency measures?
ll
Are companies encouraged to participate because of
contingent regulation in case of nonparticipation?
ll
Labelling of appliances,
products etc.
When a knowledge / information
barrier exists
ll When dealing with large groups
in consumer or service sector
Is the label well-justified by respective life-cycle cost
studies?
ll ll
When dealing with rather
uniform technologies
Is the target group timely and sufficiently informed, e.g.
through information campaigns?
ll ll
When large differences in
performance exist between
similar units
Is the label clear and transparent?
ll Financial or fiscal
instruments, e.g.
soft loans, subsidies,
investment deduction
schemes, or rebates
Is it planned to adjust the label to technology progress and
market transformation?
ll
ll
Are there supporting incentives (eco-tax, subsidy, tax
exemptions) for stimulating action?
ll
When a financial barrier is in
place
Is the target group aware of the existence of the instrument?
ll ll
Is the financial support sufficient to attract new investments
or to carry out energy audits?
ll
When an informative instrument
(e.g. energy audit) needs
financial incentives to attract
the target group
ll Is the annual budget for the instrument linked to the target?
ll
Is the procedure for getting financial support sufficiently
known by the target group and simple enough?
ll
Is it clear to the target group which technologies are eligible
for financial support?
ll
Is the list of technologies regularly updated to limit free
riders?
ll
Is the instrument implemented for a long time period to
ensure security for investors?
ll
12
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
TABLE 1 (CONT): Typical circumstances in which to apply different types of instruments
Type of instrument
Energy tax or energy
tax exemption
Typical circumstances in which
to apply this instrument
Characteristics that typically determine the success
Is the target group well-informed on existence and planned
future development of the energy tax?
When dealing with large target
groups
ll
ll When aiming to internalize
external costs
Is use of tax income properly justified and marketed to
market actors?
ll ll
To what extent does the energy tax take account of global or
Europeanwide competition aspects (e.g. by tax exemptions
for large industries)?
ll
To what extent are energy tax exemptions used as an
incentive for implementing energy efficiency measures (e.g.
in a voluntary agreement scheme)
ll
Information, knowledge
transfer, education,
training
When a knowledge barrier exists
ll
Is the information well-linked to the customer type within
the target group?
When dealing with large target
groups
ll
ll ll Is the information clearly linked to other instruments
(regulation, financial/fiscal, voluntary agreement, etc.)?
Source: Adapted from Harmelink et al., 2008.
targets, an effort-defining policy. The implementation toolbox
can play an important role in establishing the success factors
mentioned in the third column. In this same example, the
development of energy efficient technology lists and links to
equipment suppliers (as tools in the implementation toolbox)
may accelerate applications for the subsidy.
Within the context of the proposed policy pyramid, the first
three categories of instruments shown in Table 1 are effortdefining policies, and the remainder are supporting measures,
although information measures may also be part of the
implementation toolbox. For example, as a supporting measure,
subsidies to companies for installation of energy efficient
equipment can reduce their cost of achieving GHG emission
13
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Country analyses
The country analyses in this section summarise the policy
packages of China, India, Japan, the Netherlands, the United
Kingdom and the United States, using the policy pyramid
framework available in IIP’s Industrial Efficiency Policy
Database4. Each country analysis also includes a timeline,
showing when policies were introduced or terminated in
that country and the different phases of policies. In the
pyramids, effort-defining policies and supporting measures
are numbered. The numbered tools or guidance materials in
the implementation toolbox correspond to the specific effortdefining policy or supporting measure that they underpin.
levels by 2015, and by 3.5% by the end of 2011
cap energy use at 4 billion tonnes of coal equivalent (tce) by
2015
ll reduce emissions from energy use per unit of GDP by 17%
from 2010 levels by 2015.
ll To meet FYP targets, a wide array of policies has been
implemented: elimination of backward technology, mandatory
energy-saving targets and efficiency standards, financial
support and rebates, as well as electricity pricing mechanisms
(Figure 2). The 12th FYP contains additional preferential
measures for developing energy-efficient technology.
Implementation of these measures is still being defined and
designed at the provincial level.
For each country, the online policy database provides:
GDP, energy consumption and GHG emissions data for the
industry sector
ll Mandatory requirements in China are quite common, and can be
defined in relatively prescriptive terms, which are less common
in Western industrialised economies. These requirements
include elimination of backward technology and mandatory
energy-efficiency standards for industry by production process,
and product standards for appliances. The level of enforcement
of the mandatory requirements, however, is not always clear.
Overall policy package and timeline
ll Individual factsheets on each policy, containing information
such as:
ll –– general description of the policy;
–– objective and targets of the policy;
The Top-1 000 Program, the key policy for the largest energyintensive industries, has been successful in achieving, and even
surpassing, the programme goal of achieving energy savings of
100 million tonnes of coal equivalent (Mtce) over the 11th FYP
period. The programme is now being expanded into a Top-10
000 Program (Price et al., 2011).
–– monitoring, reporting, verification and enforcement regimes;
–– costs to the target group and the government;
–– ease of implementation;
–– other policy requirements; and
–– estimated impacts and major conclusions.
To underpin the Top-1 000 and Top-10 000 Programs (and
provincial policies that target “key enterprises”)5, a number of
key supporting measures have been promulgated, including
requirements for (i) assignment of energy managers, (ii) energy
consumption data reporting, (iii) most key enterprises to have
completed energy audits, and (iv) subsidies for energy-saving
retrofits.
China
Economy-wide targets under the Central Government’s FiveYear Plans (FYPs) are a key driving force in all industry-related
policies and measures. The target in the 11th FYP was to
reduce energy use per unit of GDP by 20% between 2006 and
2010. According to the 12th FYP goals, China will also have
mandatory targets to:
5 China's energy conservation law and many subsequent regulations employ
the term “key enterprises,” which includes all industrial enterprises with annual
energy consumption of over 10 000 tonnes of coal equivalent (tce), and, if also
so designated by provincial/local governments, enterprises with annual energy
consumption of over 5 000 tce. All Top-1 000 enterprises and all Top 10 000
enterprises are key enterprises.
cut energy consumption per unit of GDP by 16% from 2010
ll 4 Available at iepd.iipnetwork.org
14
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
identifying energy-saving potentials. In terms of monitoring
and reporting, many requirements exist in China. However,
transparency and public availability of the reported data are
limited, and it is often unclear whether the data are actually
used for policy evaluation and revision purposes.
In addition, a new measure introduced late in 2010, requires
energy efficiency appraisals for new large industrial projects
(fixed asset investments) to be completed. All new investments
must undergo independent assessments and government
reviews on whether they are energy-saving before being
approved by regulators. Projects that pass will be subject to
government supervision, and managers are required to submit
energy reports (Xinhua, 2010).
Of the reported impacts of different policies, it is often not easy
to assess the extent to which the results are actually attributed
to that individual policy, to other policies or to other trends that
influence energy efficiency and energy use (e.g. changes in
economic structure or product mix). Even so, China has initiated
a remarkable number of energy-saving policies and programmes
in the last five years, many of which seem to have reached
their own stated goals in support of the overall national goal to
reduce economic energy intensity by 20% (Levine et al., 2010).
The use of differentiated electricity pricing, in which electricity
prices are higher for companies with higher electricity intensity,
differs from common practice in other countries.
Market-based mechanisms are being increasingly developed.
For example, an energy service company (ESCO)-based
programme, in development, targets projects with energy
savings between 100 and 10 000 tce overall, and between
500 and 10 000 tce in industry. Incentives are directed to
ESCOs, who must advance more than 70% of the capital in
projects, and agree to share the energy savings with the clients.
The programme will support boiler/furnace retrofitting, waste
heat and waste pressure utilization, motor system energy
conservation, energy system optimization, green lighting and
energy conservation in buildings (MOF, 2010; NDRC, 2010).
In support of China’s effort-defining policies and supporting
measures, the implementation toolbox in China contains, among
others:
elaborate training programmes and standards for energy
management and audits (under the Top-1 000 Program);
ll lists with closure thresholds and efficiency standards for
different types of industries (elimination of backward
technology and the industrial performance standards) and
guidelines for validation;
ll lists of qualified ESCOs;
ll an energy performance contracting standard (for the financial
rewards programme).
ll Note that this is not an exhaustive list, and numerous additional
tools are present other than those listed in the above and in the
policy pyramid.
Energy auditing in China is currently more focused on
accounting (how much energy is used where), and less on
15
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Figure 2: China's policy package (main initiatives, not all are included)
16
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
India
were not widely implemented. These standards now appear
to feed into the specific energy consumption (SEC) targets
established under a new white certificate scheme (trading of
energy savings) currently under development. This so-called
Perform Achieve and Trade (PAT) scheme is a comprehensive
policy scheduled for introduction in 2011, following the 2010
amendment to the ECA. The PAT could constitute an effective
mix of regulation by setting mandatory energy-intensity targets
for energy savings, combined with a flexible market mechanism,
the trading of energy saving certificates (“white certificates”) to
secure overall cost-effectiveness.
India has made reasonable progress in terms of improving
its energy efficiency in recent years. However, a major part of
this improvement is attributed to the structural change that
occurred in the Indian economy (economic structure shifting to
less energy-intensive activities and products) (Balachandra et
al., 2010). Despite this factor, the energy intensity of industry
is, on average, still relatively high compared to other regions in
the world. In addition, energy performance varies widely among
installations within industrial subsectors due to a wide range
of vintages, production capacity, the quality of raw materials
and product mixes. In the cement and fertiliser sectors, for
example, India has some of the best-performing plants in the
world. This wide variation poses a challenge to policy makers in
designing effective and targeted policies. India’s policy package
is illustrated in Figure 3.
The overall objective of the PAT scheme is to save 10 million
metric tonnes of oil equivalent (mMtoe) in the first PAT cycle
until 2014 (within the 23 mMtoe target of the overarching
National Mission On Enhanced Energy Efficiency) (Dhingra,
2011). The company targets currently under development are
based on the mandatory energy efficiency standards initiated
previously by the Bureau of Energy Efficiency.7 However, its
design is challenging under Indian conditions because of
the lack of good quality energy consumption data and the
limited time available for preparation (less than two years),
as well as the large differences in energy efficiency and
plant characteristics within one sector (Thapliyal, 2011). In
addition, solid monitoring, reporting and verification (MRV) and
enforcement systems will be needed to make the scheme a
success.
The Energy Conservation Act (ECA) of 2001 provided for
the establishment of the Bureau of Energy Efficiency (BEE),
the development of energy efficiency standards by industrial
product/process, and the requirement to have energy audits
carried out by an accredited energy auditor and assign a
certified energy manager in energy-intensive and other larger
energy consumers (known as “designated consumers”).
In practice, industrial energy efficiency policy was, until recently,
limited to the mandatory energy management component of the
ECA. The impact of the mandatory energy management policy
is difficult to assess because of the lack of policy evaluation
studies (Bhattacharya and Cropper, 2010). However, according
to local experts,6 the capacity of the instruments within the
policies to drive energy efficiency is limited. The characteristics
of the instruments themselves would support this view: there
is no obligation to implement identified savings measures from
the audits.
In 2011, India also introduced a range of financing mechanisms
administered by the India Renewable Energy Development
Agency (IREDA) and preferential loans, venture capital funds
and guarantees administered by the Energy Efficiency Services
Limited (EESL) under the Framework for Energy Efficiency
Economic Development (FEEED). It is too early to assess the
impact of these new mechanisms.
The development of energy consumption standards by
production process began in 2001, but was slow to be
implemented for all sectors because of difficulties encountered
within the diversity of India’s industries. Standards were
developed for the cement and pulp and paper sectors, but they
The implementation toolbox is strongly focused on energy
management and auditing, with certification and training of
auditors, an energy audit and management support programme
from the Bureau of Energy Efficiency, and energy management
and auditing protocols.
6 Anonymous representative from academic, nongovernmental organization
(NGO) and former Indian government background.
7 Pers. comm. Shakti Foundation representative.
17
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Figure 3: India’s policy package and timeline
18
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Japan
sectors. It is also voluntary in terms of participation and uses
targets unilaterally set by industry. For several years, the
Ministry of Environment has been pushing for a mandatory
cap-and-trade system, but this system is strongly opposed
by industry as well as by the Ministry of Economy, Trade
and Industry. In December 2010, the government officially
postponed plans for a national (mandatory) emissions trading
scheme.9
Over the past 40 years, since the oil crisis of 1973, industrial
energy efficiency in Japan has improved significantly (IEA,
2008). Key drivers have been the lack of domestic energy
resources, rapid economic development and high energy
prices. In energy efficiency policy over the past decades, the
government has strongly relied on voluntary approaches,
particularly within industry. This choice is partly based on the
concern that the competitive position of Japanese industry
could be at risk under a heavy regulatory regime.
The above suggests there is clear room to strengthen and
complement the existing voluntary measures with mandatory
effort-defining policies.10 In recent years, different types of
policy instruments have been under development, including
an energy efficiency obligation, defined in benchmarking
terms (top-of-the-world efficiency level, similar to the Dutch
Benchmarking agreement) and piloted by a limited number
of industry sectors. At this stage, it is too early to evaluate
the impacts of this policy, because many provisions are still
unclear. In principle, however, the obligation has the potential to
establish a stronger role for the government in defining ambition
levels and enforcing compliance, without losing sight of the
competitive position of Japanese industry.
Japan’s policy package is illustrated in Figure 4. The Keidanren
Voluntary Action Plan (VAP) in industry is considered a key
pillar in Japan's industrial energy and emissions policy by the
government, although its targets are set unilaterally by industry,
and oversight is also mainly carried out by industry. In itself,
the VAP is comprehensive in coverage (40% of Japan’s total
emissions and 80% of industrial emissions) and successful in
terms of reaching the targets that it has set for itself. It has,
however, met criticism by academics and NGOs,8 particularly
on whether those targets were defined with sufficient ambition,
the low level of assurance that the targets will be met, and the
lack of transparency and independent oversight in monitoring
and compliance. As a result, not enough verifiable insight is
available regarding the remaining potentials for efficiency
improvement in industry.
The implementation toolbox has a relatively strong focus on
energy management and auditing, with guidelines, training and
an energy audit support programme. In addition, guidelines are
available for the allocation of permits in JVETS, guidelines for
benchmarking in the new efficiency standards, and use is made
of the tools made available by the United Nations Framework
Convention on Climate Change in the Emission Credit Scheme
for SMEs.
In addition, the current emissions trading system in Japan
addresses companies not covered by the VAP and currently has
80 target participants from various industry and nonindustry
9 Statement of Japan's National Strategy Minister, Koichiro Gemba. December 28, 2010. Available at: www.reuters.com/article/2010/12/28/us-climatejapan-idUSTRE6BR06120101228.
10 This is also supported by the OECD’s Energy Policies of IEA Countries. 2008 Japan Review. Retrieved from: www.iea.org/w/bookshop/add.
aspx?id=342.
8 CAN Japan, Kiko Forum, Chiba University of Commerce.
19
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Figure 4: Japan's policy package
20
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Netherlands
agreements, and their requirement to implement measures with
a payback of five years or less, they are required to comply with
energy efficiency improvements in their environmental permit
under the Environmental Management Act and are subject to
an energy/carbon tax. This sanction is not often used, because
companies usually achieve with their targets. In cases where
companies do not meet their targets, or do not participate
in a negotiated agreement, a recent evaluation showed that
requirements laid down in the permit are often not ambitious,
and enforcement is weak (CE/Vrom Inspectie, 2010).12
Dutch industry’s energy-intensive economic structure (in
combination with a very open export-oriented economy) has
led to long-standing and ongoing attention to industrial energy
efficiency. The Netherlands’ policy package (Figure 5) has had
a strong emphasis on negotiated agreements,11 with, in recent
years, a significant role for the mandatory EU emissions trading
system (EU ETS).
In the agreements, targets have been negotiated between
industry and government, with third-party experts involved to
review the accuracy of the stringency of the targets. For heavy
industry, the definition of targets shifted from a rate of change
(%/year) to a performance level to be reached (i.e. a benchmark
expressed relative to that of competitors). A wide range of
supporting measures is required, such as the obligation to carry
out an Energy Efficiency Plan and make investments deemed
“profitable” according to government-defined guidelines. The
scope of the agreements has grown over time, in terms of sector
coverage as well as the eligibility of measures to meet the
targets, having been extended from on-site energy efficiency
only to off-site (or chain) efficiency.
In the first ten years, the negotiated agreements were quite
successful in driving efficiency improvements; however, recently
the rate of improvement has slowed. No significant charges,
levies or energy/carbon taxes are used as part of the Dutch policy
package for industry. This absence may be one of the reasons
why the impact of the policy package is diminishing over time.
This diminished impact is, in part, a sign that improvement
potentials are becoming smaller (the “low-hanging fruit” has
been picked), but it also suggests that stronger measures may
be needed to drive continuing efficiency improvements.
The implementation toolbox in the Netherlands is well equipped,
with a broad array of support tools, including:
Under Phases 1 and 2 (to 2013) of the EU ETS, which also
covers Dutch heavy industry, allocation methods were devolved
to each EU member state for determination. For Dutch industry,
allocations in the EU ETS have so far largely mirrored the
targets in their negotiated agreements. However, from 2013,
benchmarking will be used at the EU scale to define allocation
levels for companies, which is expected to be the principal driver
of efficiency improvements, superseding the incentive to act
under the negotiated agreements.
Technical support from the energy agency, including training
and workshops;
ll Checklists for implementing energy management under the
negotiated agreements;
ll Methodologies and manuals for benchmarking;
ll Guidelines, templates and examples for Energy Efficiency
Plans;
ll A range of other policy instruments, including various subsidies
and fiscal incentives, exemption from energy and carbon taxes,
and technical support, supports the negotiated agreements.
Lists of profitable measures;
ll Technology eligibility lists for subsidies; and
ll Disincentives are used to a relatively limited extent in the Dutch
policy mix. If companies do not meet the targets set out in their
Monitoring and reporting protocols (including a system of
Guarantees of Origin for combined heat and power [CHP]).
ll 11 Negotiated agreements are policies in which the targets and main requirements of the policy are negotiated between the industry sector (companies
themselves or industry associations) and governments. Third parties may also
be involved. They differ from voluntary policies, which are recognized and often
supported by the government but in which the targets and goals are unilaterally
defined by the industry sector.
12 Exclusion does not automatically lead to energy or CO2/taxes, as is the case
in the United Kingdom. There would need to be a specific policy decision made to
do this, which is not very likely to happen.
21
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Figure 5: The Netherlands' policy package
22
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
United Kingdom
Phase I-II of the EU ETS (Phylipsen et al., 2005; 2007).
Compared to other industrialised countries (including the
Netherlands), the UK industry accounts for a relatively smaller
proportion of national energy consumption. Industrial energy
consumption constitutes about 22% of total final energy
consumption, and about 55% of this energy use is by energyintensive sectors, mainly iron and steel, chemical, paper and
pulp, nonmetallic minerals, food production and nonferrous
metals. This proportion might explain why the UK government,
from the start of its energy efficiency policies, has focused on
heavy industry as part of a broader perspective that considers all
sectors (Figure 6).
The CCAs are supported by advice on energy saving, carbon
management and financial support from the Carbon Trust,
guidance on monitoring, and a fiscal stimulus by means of the
enhanced capital allowance scheme. These factors provide an
comprehensive package that addresses most of the barriers and
drivers faced by the industry.
The Pollution Prevention and Control (PPC) Act also mandates
the use of Best Available Technology. However, because
companies that enter into a CCA with the government are
exempt from PPC requirements, the Act’s contribution to UK
industrial energy efficiency policy is, at best, the added incentive
that it provides for companies to enter into CCAs.
Central in the UK industrial energy efficiency policy mix are the
Climate Change Agreements (CCAs), negotiated between the
government and industry associations, with third-party experts,
which help the government assess the ambition of industry’s
suggested targets (AEA Technology, 2004).13 An important
incentive for companies to enter into the CCAs with the
government is the exemption from the paying for the full value of
the climate change levy (CCL).14 Prior to 2011, when companies
complied with their targets, they received an 80% discount.
From 2011 onward, the discount is reduced to 65%.
In the United Kingdom, the implementation toolbox is well
equipped with a broad range of tools, including:
guidance on how to determine targets;
ll guidance on setting up monitoring plans;
ll reporting annual achieved savings guidelines;
ll Best Available Technologies (BATs);
ll To date, the targets set under the CCAs have been significantly
exceeded. This large over-achievement casts some doubts
about the ambition level of the CCAs. After the introduction
of the EU ETS, ETS participants preferred to continue to take
part in the Climate Change Agreements as well, because the
discount on the Climate Change Levy was financially significant,
and especially so for energy-intensive industries. Thus far, the
EU ETS has had few impacts in the UK industry sector beyond
those already produced by the CCAs. Note that this result is not
unique to the United Kingdom; most countries show a limited
tendency to go beyond existing policy efforts for industry in
technology and product eligibility lists for financial support;
ll guidance on monitoring and reporting of annual GHG
emissions;
ll base-year data validation;
ll permitting for the EU ETS; and
ll energy saving and carbon management advice and financial
support from the Carbon Trust.
ll 13 The UK Government’s Department for Environment, Food & Rural Affairs
(Defra) was the principal negotiator in the Climate Change Agreements process.
It contracted Future Energy Solutions (FES, formerly known as ETSU) to provide
independent technical advice and policy support for the development and operation of the agreements. FES has assessed all milestone data provided by the
sectors and made recommendations on the results to Defra. The Department of
Energy and Climate Change (DECC) now administers the UK’s Climate Change
Programme including the CCAs.
14 The Climate Change Levy (CCL) is a tax on the use of energy in industry,
commerce and the public sector. By introducing this levy, the cost of energy consumption increases, which in theory should lead to more investments in energy
efficiency measures because they become economically more attractive. Up until
2011, CCA participants got a 80% discount on the levy, conditional on meeting
the targets set. Now the discount on the levy is 65%.
23
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Figure 6: The United Kingdom's policy package
24
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
United States (Federal)
companies enjoy all of the benefits.
Energy production and transport represent a large share of
total GHG emissions in the United States, and overall energy
efficiency is low in comparison to other OECD countries.
Nevertheless, in recent years, the energy intensity of heavy
industry has improved more than other sectors of the US
economy. The US policy package is illustrated in Figure 7.
The schemes have very limited outside involvement in terms
of evaluating the identified potentials and targets. Very limited
monitoring of progress toward achievement of the voluntary
targets (such as the Industrial Technologies Program, the
Climate Leaders or the ENERGY STAR Program for Industry)
takes place, and no penalty exists for noncompliance.
State legislation makes up for the majority of US energy
efficiency policy. Only a small number of federal policies
are in place that directly target energy efficiency and/or
emission reductions. Federal policies and programmes consist
principally of the Clean Air Act (CAA), the US Department of
Energy’s (DOE’s) Industrial Technologies Program, and the US
Environment Protection Agency’s (EPA’s) Climate Leaders15 and
ENERGY STAR Programs for Industry.
In addition, the cost-effectiveness of policies is not assessed in
a structured way. As a result, information is lacking to support
potential improvements to individual policies or to identity
better-performing or better-suited policies.
The CAA is the only federal policy with a mandatory element.
From 2011, it requires selected (existing and new) installations
to obtain a permit for polluting emissions to air and to install
the Best Available Control Technology (BACT) to control GHG
emissions. In addition, it sets various emissions standards,
among which are the emission standards for boilers, process
heaters, and certain solid waste incinerators, the so-called Boiler
Maximum Achievable Control Technology (Boiler MACT) rule. 16
Except for the Clear Air Act, all policies have a purely voluntary
character, with industries committing to a level of effort.
Significant government resources support companies’ efforts
to fulfil their commitments. Calculation tools and monitoring
formats are provided, and companies receive free technical
support to establish and implement energy management
schemes. In addition, various financial incentives are available
to support companies in the uptake of energy efficiency
improvements. These incentives include a tax credit scheme,
an accelerated depreciation scheme, and a loan guarantee
programme.
Because the permitting procedures for GHG emissions have yet
to start and the specification of BACTs is not yet completed, no
information is available on how energy efficiency improvements
and corresponding emission reductions will be dealt with. Recent
developments suggest MACT implementation will be slow for
two reasons. First, the EPA has extended the reporting deadline
for GHG emissions from large emitters and fuel suppliers,
originally set for March 31 to sometime midyear 2011.17
Second, a package of spending cuts passed by the House of
Representatives would see reductions in billions of dollars from
the EPA’s budget, and includes an amendment to deny 2011
funds for EPA’s GHG regulations.18
The voluntary character of the programmes, in combination
with extensive free government support to address financial
and technical barriers, has resulted in a high acceptance level
within industry. The programmes result in actual emission
reductions, but how much the programmes cause the level of
emissions reduction compared to what would have happened
anyway (i.e. the additionality) is unclear. Because the actions are
all voluntary, it is likely that companies mainly participate when
the expected reduction measures meet their internal payback
requirements. Moreover, the cost-benefit ratio of the measures
is unbalanced, because the government covers the majority
of costs (for identification of reductions, setting up energy
management systems, and target setting), and the participating
As with all permitting policies, the effectiveness and efficiency
of the CAA provisions for GHG emissions will strongly depend on
the stringency of the actual provisions that would drive energy
efficiency improvements or GHG emission reductions. Because
16 Under the CAA, various standards have been set for various types of emissions and activities. (e.g. the Reasonably Available Control Technology (RACT)
requirements for Marine Vessel and Barge Loading). However, MACT covers the
largest set of activities.
17 See http://www.environmentalleader.com/2011/03/02/epa-delays-deadline-for-ghg-reporting/.
18 See http://www.environmentalleader.com/2011/02/22/house-approvedbudget-blocks-epa-rules/.
15 In September 2010, EPA announced that the Climate Leaders programme
will phase down its services. No budget has been reserved for it in the new budget
period. EPA will encourage and assist the transition of partners in the Climate
Leaders programme into nonfederal programmes (i.e. programmes at the state
level or local level).
25
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
and establishes a silver, gold and platinum badge system.
these provisions have not yet been specified, the effectiveness
of the permitting requirements under the CAA to drive energy
efficiency is still unclear.
The US federal government will leverage the SEP to deploy
federal energy programmes such as the Save Energy Now
LEADER program (participating LEADER companies are given
priority access to energy assessments and other resources).
A new certification programme, the Superior Energy
Performance Program (SEP), is an American National Standards
Institute (ANSI)-accredited initiative currently in development
and scheduled for introduction in October 2011, following a
number of demonstration projects in 2008-2010. It will provide
companies with a framework for implementing the international
standard for energy management systems (the ISO 50001
standard). The certification system also provides a method for
recognising energy performance achievement after validation,
Most US policies are supported by an extensive implementation
toolbox, comprising various technical support tools, including
tools and guidance for GHG inventories, technical assistance to
develop and/or implement energy/GHG management plans, and
technical assistance such as best practice guidebooks, training
and webinars
26
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Figure 7: Federal policy package of the United States.
27
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Comparison of the policy packages of the six countries
Act have the potential to drive efficiency improvements and
reduce emissions; however, the political will and the resources
to deploy the new CAA provisions are still uncertain.
The role of effort-defining policies
In general, countries are increasingly implementing effortdefining policies. This trend is likely based on several elements,
including: the growing body of experience and lessons learned
regarding the effectiveness of policy packages that have no
effort-defining policies, the need to achieve further efficiency
improvements to mitigate climate change and achieve energy
security, and the momentum of international climate change
discussions.
Message 1: As governments define their policy package to
support their energy efficiency and climate mitigation goals,
they need to start by defining the overall energy efficiency or
emission reduction ambition levels through an effort-defining
policy. As such, what matters is not the quantity of effortdefining policies but their quality and scope.
Of the countries surveyed in this paper, China, the Netherlands
and the United Kingdom have set mandatory energy efficiency
or GHG emission targets. In India, Japan and the United States,
such mandatory effort-defining policies are now emerging,
albeit with political challenges stemming from domestic
resistance and diminished international coordination.
The choice of effort-defining policies
In terms of effort-defining policies, countries have generally
implemented mandatory standards, mandatory targets,
negotiated agreements, voluntary agreements or a combination
of these. China’s large-sized industry is subject to targets both
under the Top-1 000 Program and under industrial energy
performance standards. India initiated the definition of norms
for its sectors, and these norms have now been modified as
targets under the PAT scheme. The United Kingdom and the
Netherlands have targets under the EU ETS and the negotiated
agreements. Japan has voluntary targets under the Kaidanren
Voluntary Action Plan.
Until recently, India had made little use of regulation linking
policy objectives to the practical details of policy design,
implementation and enforcement, as demonstrated by the
complexity of developing energy efficiency standards and the
resulting lack of progress in the development and deployment
of the standards. Beyond support for energy auditing and
energy management, the implementation toolbox in India is
still relatively bare. Although India imposed mandatory energy
management, it did not go so far as to require companies to
actually implement the identified energy efficiency measures or
to improve performance. A new effort-defining policy is under
development, the Perform, Achieve and Trade (PAT) scheme.
The mandatory energy management scheme will have a
supporting role in meeting its targets.
Mandatory targets
From an economic efficiency perspective, many governments
have introduced, or are now considering introducing, marketbased instruments in the form of emissions trading or white
certificates scheme to address environmental externalities.
Such pricing of emissions or energy savings, in principle,
strengthens the financial incentives to improve energy
efficiency by pricing the marginal cost of GHG emissions/
energy.
In Japan, mandatory benchmarking efforts for the industry
sector are also under development and should compel
industrial companies to go beyond efforts under the voluntary
schemes dominated by industry-set targets.
Of the countries surveyed, EU member states, the Netherlands
and the United Kingdom have the greatest experience with
emissions trading schemes, because they have been subject
to the EU ETS since 2005, and the United Kingdom has had
The United States has only a very limited focus on effortdefining policies, which hampers the effectiveness of its policy
packages. The recent BACT requirements under the Clean Air
28
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
its voluntary UK ETS since 2002. Japan has a small voluntary
ETS scheme, and the United States has some regional schemes
and detailed draft federal legislation, although passing of the
federal legislation looks highly unlikely at present. India’s PAT
scheme is a pioneer among white certificates that apply to the
industry sector.19 Although emissions trading schemes can drive
both energy efficiency improvements and emissions reductions,
white certificates schemes can drive only energy efficiency
improvements and do not distinguish between energy sources,
thus creating uncertainty as to how the policy will drive GHG
emissions reductions overall.
to negotiated or mandatory targets has not yet been feasible due
to opposition from industry and some government departments.
Negotiated agreements, such as in the Netherlands and the
United Kingdom, have also been employed before mandatory
targets or as an alternative to other environmental regulations
and can be an important way to get industry buy-in. In these
countries, industry is now also subject to mandatory targets
under the EU ETS.
To encourage participation in negotiated agreements, some
countries have chosen to apply a mandatory measure less
preferable to the target group in case of noncompliance or
nonparticipation in the voluntary/negotiated agreement.
Put another way, companies that choose to take part in the
agreements receive rewards for doing so by being exempted
from a less preferable measure. In the United Kingdom, for
example, companies choose to comply with the negotiated
targets established under the Climate Change Agreements to
receive a partial exemption from the Climate Change Levy (65%
from 2011, previously 80%). If they do not comply with the
agreements, they are responsible for paying the full levy. In the
Netherlands, the Long-Term Agreement (LTA) participants are
exempt from environmental permitting requirements and partially
exempt from the broad-based energy/carbon tax.20
If countries strive for economic efficiency, they may choose to
implement emissions trading or white certificates schemes. The
concept of benchmarking, where a target is defined relative to the
performance of competitors either nationally or internationally as
introduced in the Dutch Benchmarking Agreement, is increasingly
used in policymaking, including in the EU ETS post-2012 and the
Japanese energy efficiency benchmarking scheme.
Mandatory standards
There is a clear role for industrial energy performance standards
(e.g. emissions or energy per tonne of clinker/cement). These
standards may be more straightforward to develop and
implement than cap-and-trade (or similar) schemes, although
they also may be less cost-effective and provide less flexibility in
implementation (as described on page 30).
Experience has shown that negotiated agreements supported
by the threat of regulation or rewards for participation are much
more effective than purely voluntary agreements and can be as
effective as mandatory targets, if not more effective, because the
target group is usually more involved and, therefore, perceives
negotiated agreements more favourably than mandatory
instruments.
Voluntary targets and negotiated agreements
Not all governments have implemented mandatory energy
efficiency or GHG emission targets or standards as a first choice.
Some countries have implemented negotiated agreements or
voluntary targets first (or instead).
Reasons for implementing voluntary targets include cultural and
competitiveness concerns, and the maturity/history of energy
efficiency or GHG policies in the country. This has been the case,
for example, in Japan and the United States, where the transition
Message 2: Mandatory targets, such as cap-and-trade and
white certificates schemes, negotiated agreements (when
these are supported by rewards for participation or the threat
of regulation), and industrial product/process standards can be
viable effort-defining policies to encourage energy savings and
GHG reductions.
19 Several European countries also have experience in white certificates trading, and industrial energy efficiency improvements are usually eligible for white
certificates. However, the energy efficiency obligation is put on energy utilities,
producers or distributors rather than on industrial installations.
20 Although LTA/benchmarking participants are not technically “exempt” from
the energy component of the permit, they just have to prove their compliance with
the covenants in order to be granted compliance with the energy-related provision
of the permits of the Environmental Management Act (EMA) (so basically the obligations under the Negotiated Agreements are adopted as the EMA obligations).
Similarly, the permit and obligations under the EU ETS act as the GHG emissions
part of the EMA (as agreed in the relation between EU ETS and the Intergovernmental Panel on Climate Change [IPCC]).
29
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Combinations of effort-defining policies
Generally, standards apply from the moment they are
implemented, while targets are formulated to be reached over or
by a certain period.23
In the previous sections, we highlighted the role and choice of
effort-defining policies. Here, we focus on whether and how
the two major types of effort-defining policies, targets and
standards, can or should be combined.
A standard is usually relatively narrow in scope (in terms of
the coverage of energy use or emissions). This is because the
performance of the equipment or process has to be suitable
for standardisation across the population (e.g. steam boiler
standards need to specify the temperature and pressure of the
produced steam). Standards can be used to address a part of
energy consumption that would otherwise be difficult to target,
because that part occurs very diffusely across many sectors
and players. Exceptions exist to this pattern, however, such as
standards on energy management and standards on products
such as China’s industrial energy performance standards (e.g.
steel slabs).
The implementation of minimum efficiency standards is
considered worthwhile to remove the least efficient technology,
production processes and equipment from the market. In a
combined application of targets and standards, minimum
efficiency standards would work on the bottom-end of the
market (in terms of efficiency), while targets can go beyond
these actions and aim for higher ambition levels.
In this context, “targets” can be voluntary, negotiated or
mandatory targets for energy efficiency or carbon-intensity
improvements, energy savings or emission reductions. These
targets are sometimes accompanied by tradable permits
(white certificates schemes or emissions trading permits).
Targets can be defined either narrowly (e.g. energy savings in the
production of food cans) or broadly (e.g. total industrial energy
consumption) and cover energy use or emissions in the target
group more comprehensively (Figure 8).
Standards, here, are defined as minimum efficiency standards
(or maximum energy consumption or emission standards),
defined either at the level of equipment (motors and drives
or steam boilers) or processes or products (production of
cement and steel).21 Some examples of combined targets
and standards, currently implemented or under development,
include:
In general, targets and standards can be complementary (i.e.
synergistic and hence desirable) as long as they differ in scope,
i.e. if the total amount of energy use and/or emissions that are
affected by the instruments is different, or if they affect energy
use and/or emissions from different sources.
The BACTs being currently defined for boiler efficiency under
the Clean Air Act in the United States, in combination with
the voluntary programmes in place such as Climate Leaders;
FIGURE 8: Relationship between targets and standards
ll The definition of industrial efficiency performance standards
in China, where a minimum efficiency performance standard
is defined for process and equipment, in combination with
a more ambitious voluntary (“reach”) standard, energy
efficiency appraisals for new large industrial projects, and the
broader mandatory targets under the Top-1 000 Enterprise
Program;
ll Equipment standard
SECTOR 1
SECTOR 2
SECTOR 3
SECTOR 4
Target
Narrow
Scope
The maximum heat losses defined in Germany’s Small-Scale
Combustion Plant Ordinance (with capacity up to 10 MW),
which can, in part, overlap with the EU ETS.22
ll Target Medium Scope
21 Minimum efficiency standards can also be implemented voluntarily. In
addition, different standards are possible, i.e. prescribing the implementation of
certain technology or components, limiting size, etc. However, for simplicity and
because these standards are not as common, they are not covered here.
22 http://www.iea.org/textbase/pm/?mode=pm&id=1524&action=detail.
Process standard
Target Broad Scope
23 Though standards can also be defined for a future compliance date, e.g. the
fuel efficiency and CO2 emission standards for cars. In addition, targets can also
be defined as annual improvement rates.
30
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
TABLE 2: Different elements of targets and standards*
Element
Type 1
Type 2
Negotiated
Type 3
Obligation level
Voluntary
Mandatory
Definition of effort
Relative (per unit of input or
product)
Primary objective
Energy efficiency
Energy savings
CO2 or GHG emissions
Sectoral scope
One sector or subsector
Multiple sectors
Cross-cutting
Participant
definition25
Subset of companies in target
group, e.g. only SMEs
Subset of companies in target
group, e.g. only installations >
than 20 MW
All companies in target group
System boundary
Only part of on-site energy
consumption and/or
emissions26, e.g. energy
use from boilers and CHP
installations
Only part of on-site energy
consumption and/or emissions27,
e.g. energy use in stationary
sources
Total energy consumption and/
or emissions, e.g. emissions
from fuel combustion and
process emissions
Absolute
The overall impact of a standard or target is determined by a
number of different elements, such as which equipment or
processes it covers, which sectors and sources are affected (only
energy-related emissions, total energy use or emissions, or only
for certain equipment and processes; only on-site energy use
or also purchased electricity or energy in transport), and which
participants are included (all companies or only those over a
certain size). These various elements could jointly be considered
to define the scope of the policy instrument.
scope, because they can employ a wider set of measures to meet
the target and have a bigger impact on total emissions (including
fuel switch, material efficiency improvement, structural changes
in product mix, behavioural changes, and reduced demand for
products).
In addition, the primary driver of the instrument (energy
or emissions) and the implementation mode (voluntary or
mandatory targets; absolute or relative targets24) determines
the overall impact that a target or standard can have. Targets
defined in absolute GHG emissions (rather than energy
efficiency, or relative targets, per unit of production) have a wider
When the effectiveness28 and efficiency29 of a (combination
of) policy instrument(s) are being evaluated, several issues are
important to consider. The first issue is that, without sufficient
Table 2 shows the most important elements of the scope of
standards and targets, with examples of narrow-to-broad
definitions for the various elements.
25 E.g. SMEs versus non-SMEs, participation thresholds (e.g. in terms of energy use, emissions, production, capacity, turnover), certain regions or countries.
26 E.g. only certain type of equipment or certain processes, installations over a
threshold size, certain GHGs.
27 E.g. only certain type of equipment or certain processes, installations over a
threshold size, certain GHGs.
28 Does the policy lead to meeting the target?
29 Or cost-effectiveness: Does the policy lead to meeting the target at lowest
overall cost?
24 Absolute targets define a total quantity/percentage of energy conservation
or emissions reduction to be achieved (at a certain date, or annually). Relative
targets are usually intensity-based, i.e. per unit of production, expressed in either
a reduction in intensity (at a certain date, or annually) or a certain value to be
achieved (i.e. a benchmarking or other specific GJ/t value).
31
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
control and enforcement, standards become ineffective, and
might not add much value to, for example, a voluntary target.
The second issue is that a lack of participation could undermine
the effectiveness and efficiency of voluntary and negotiated
targets. Real or perceived fairness30 by different target groups
can also be an important factor in the overall effectiveness
of policies. Adding additional transaction costs for the
second instrument could effectively lead to an unnecessary
administrative burden (perceived or real) and, therefore, a
negative impact of combining targets and standards.
only the main ones are included for simplicity.
From Table 3, we can conclude that synergy between standards
and targets can be achieved if the difference in scope in terms of
energy use or emissions covered is large, i.e. when the standard
only covers a smaller part of the energy and emissions covered
by the target. When the scope is similar between targets and
standards, the added value of combining both instruments
becomes limited and can lead to effects such as reduced support
for either instrument, increased transaction costs or duplication
of efforts, negatively affecting both effectiveness and efficiency.
In light of the above, Table 3 presents a number of scenarios
in which standards and targets are combined, looking at the
effectiveness and efficiency of the combined policies. For the
various elements of the scope of each instrument described
above, positive and/or negative interactions between the two
are presented. Note that a greater number of scenarios exist, but
Minimum energy performance standards for equipment
are considered worthwhile in all combinations and types of
targets and standards. However, industrial product standards
and targets, if too similar in scope and ambition, can create
unnecessary duplication and undue compliance burden.
TABLE 3: Combinations of targets and standards according to the scope of each instrument
Note: Colour coding indicates the potential for a more effective/efficient combination (blue), a less effective/efficient combination
(orange) or no effect (purple). Examples provided are, in most cases, theoretical.
Element of the
instrument’s scope
Voluntary or
mandatory
Interactions
Standard is voluntary, target is mandatory:
Limited to no impact on the effectiveness of the target.
Existence of voluntary standards could increase awareness of potential measures to reach the
target. Mandatory target could stimulate increased compliance with voluntary standard.
Example: A mandatory 2%/year energy efficiency improvement target and a voluntary standard for
compressors.
Standard is mandatory, target is voluntary:
Standard can support reaching the target.
Potential to reduce support for the target, because standard reduces participants’ freedom to
choose the least-cost option to reach the target.
Example: A voluntary 2%/year energy efficiency improvement target and a mandatory standard for
compressors.
30 In case efforts in different target groups are perceived as very different.
32
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
TABLE 3 (CONT): Combinations of targets and standards according to the scope of each instrument
Note: Colour coding indicates the potential for a more effective/efficient combination (blue), a less effective/efficient combination
(orange) or no effect (purple). Examples provided are, in most cases, theoretical.
Element of the
instrument’s scope
Definition of effort:
absolute or relative
Interactions
Standard is relative, target is absolute:
Target could stimulate increased compliance with standard.
Standards can support target achievement. Synergy is larger for equipment standards and targets.
For process standards, synergy is larger when the effort definition of the standard in terms of the
amount of energy use and emissions affected is narrower than the target, and when the potential
measures to meet the standard or target are different.
The more similar the definition of effort between a process standard and target (e.g. both relative,
based on product), the lower the added value, with increased transaction costs lowering efficiency
of the combined instruments.
Examples:
A minimum efficiency standard for generators or compressors (intensity-based) and an absolute
energy savings target for paper production installations.
A minimum efficiency standard in GJ/tonne of cement and an absolute energy savings target for
cement production installations.
Primary objective:
energy efficiency,
energy use or
emissions
Standard in energy, target in emissions or vice versa:
Standards and targets can be complementary. Synergy is larger for equipment standards and
targets. For process standards, synergy is larger when the scope of the standard in terms of the
amount of energy use and emissions affected is narrower than the target, and when the potential
measures to meet the standard of target are different
The more similar the scope between a process standard and target, the lower the added value, with
increased transaction costs lowering efficiency of the combined instruments.
Examples:
Minimum efficiency standard for CHP and a CO2 emission reduction target for paper production
Minimum efficiency standard for cement production and an emission reduction target for energyrelated emissions per tonne of cement.
33
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
TABLE 3 (CONT): Combinations of targets and standards according to the scope of each instrument
Note: Colour coding indicates the potential for a more effective/efficient combination (blue), a less effective/efficient combination
(orange) or no effect (purple). Examples provided are, in most cases, theoretical.
Element of the
instrument’s scope
Sectoral scope
Interactions
Different sectors are covered by target and standard:
No overlap, therefore no interaction. Both separate measures contribute to their objectives in their
respective sectors.
Main potential effect: a (perceived) unequal playing field between different sectors (in particular
if they are in competition with each other), especially in case of strong differences in the share of
energy consumption or emissions covered, the stringency of the instrument, or one being voluntary,
the other mandatory between different sectors.
Examples:
Steel sector with a strict emission reduction target, with a lenient minimum efficiency standard
for smelters in aluminium production (competing sectors in certain applications and markets, e.g.
building materials).
Participant definition:
all companies or only
a subset
Standard and target apply to different participants:
No overlap, therefore no interaction. Both separate measures contribute to their respective
objectives.
Main potential effect: a (perceived) unequal playing field between different participants, especially
in case of strong differences in the share of energy consumption or emissions covered or the
stringency (level of the target or standard; voluntary or mandatory) between target groups. If the
target is perceived more stringent than the standard, support for the targets will be reduced.
Examples:
Steel sector with a strict emission reduction target for installations with a production capacity of
larger than x tonnes/day, with a lenient minimum efficiency standard for smaller installations.
34
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
TABLE 3 (CONT): Combinations of targets and standards according to the scope of each instrument
Note: Colour coding indicates the potential for a more effective/efficient combination (blue), a less effective/efficient combination
(orange) or no effect (purple). Examples provided are, in most cases, theoretical.
Element of the
instrument’s scope
System boundary:
all sources or only
part of the sources
Interactions
Standard and target use different system boundary:
Target could stimulate increased compliance with standard and vice versa. Synergy is larger
between equipment standards and targets, because the former has a narrow system boundary and
the latter has a broader system boundary. For process standards, synergy is larger when the system
boundary of the standard is narrower than the target.
The more similar the system boundary between process standard and target, the lower the added
value, with increased transaction costs lowering efficiency of the combined instruments and
potentially creating undue administrative burden.
Examples:
A minimum efficiency standard for electricity-powered transport equipment on-site of a steel
producer, with an emission reduction target for combustion plants.
varies between countries. In Japan (the Keidanren Voluntary
Action Plan) and the United States (Industry Technologies
Program, the Climate Leaders or the ENERGY STAR Program
for Industry), targets are set unilaterally by industry. Japan
has a number of effort-defining policies, but the role of the
government is relatively limited due to the mostly voluntary and
unilateral character of the various programmes.
Message 3: As effort-defining policies, targets and standards
can be effective in combination with each other provided
that they differ in scope (e.g. according to system boundary,
participant definition, sectoral scope, primary objective etc.).
In a combined application of targets and standards, minimum
efficiency standards would work on the bottom-end of the
market (in terms of efficiency) to establish a floor, while targets
can go beyond these actions and aim for higher ambition levels.
In the Netherlands and the United Kingdom, on the other hand,
the negotiations are between more-or-less equally strongly
positioned partners. In the United Kingdom, the Climate
Change Agreements (CCAs) were negotiated between industry,
the Department of Energy and Climate Change (DECC), the
Carbon Trust, and other third parties in an iterative negotiation
process. Third parties provided the government with information
on industrial business as usual (BAU) emissions and costeffective and technologically possible efficiency measures;
industry representatives proposed targets based on their own
assessment of their mitigation potential (Price et al., 2008).
They then entered into negotiations with the government
using industrial efficiency experts as third parties (the Energy
Technology Support Unit, now AEA Technology) to assess the
Setting ambition levels
Three influential factors in defining and maintaining the level of
ambition of energy efficiency and GHG goals of policies are:
1. The relative involvement of industry, government and third
parties;
2. The data availability, quality and transparency; and
3. Enabling the goals of a policy to be strengthened over time.
Negotiation process
The level of involvement of different stakeholders in setting goals
35
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Specific Energy Consumption data, which varies widely for each
industrial subsector (Thapliyal et al., 2011).31
ambition of the proposed targets (AEA Technology, 2004).
In the Netherlands, negotiations occurred between industry
representatives and the government, and in most cases thirdparty experts were selected to review the accuracy of “the top
10%” energy efficiency performance level.
Even though the emissions price was very low in Phase 1 of
the EU ETS, companies learned how to use the scheme and
the government-collected data. For Phase 3 of the EU ETS,
much more data was being used to determine benchmarking
and allocation levels. For India’s PAT scheme in Phase 2, the
collection of subprocess level data could help inform further
targets.
In the Top-1 000 Program in China, industry and third parties
were little involved in defining the ambition of the energy
efficiency agreements. Targets were set relatively rapidly by the
National Development and Reform Commission (NDRC) for each
enterprise to support the provincial-level targets and to reach the
overall programme savings target. The targets were not based
on detailed assessments of energy-savings potential of each
enterprise or each industrial sector due to time constraint, and it
is unclear to what extent governments are aware of the energy
efficiency opportunities (i.e. asymmetry of information) (Price et
al., 2011).
However, although starting a scheme without a certain minimal
amount of information on abatement potentials and costs would
make the target setting rather random, waiting for ideal and
comprehensive data may also be unworkable and unrealistic.
Strengthening goals over time
Good quality and detailed data can help to inform further
refinement and continuous improvement in the ambition
level of policies over time. Policies that are designed to allow
targets to be updated will drive continuous energy efficiency
improvements.
Consultation with wider stakeholders, including the public,
can also assist governments in implementing more ambitious
policies.
Message 4: To define ambitious energy efficiency or GHG
goals, governments, industry representatives and third-party
experts should be involved in the design and negotiation process.
Experience has shown that the hiring of third-party sector
experts allows governments to negotiate more ambitious targets
than would otherwise have been the case. A consultative process
can also support more ambitious targets.
To provide certainty to investors, policy makers need to create
visibility of policy design decisions, such as the effects on
emissions prices, as a continuous process, so that price visibility
is maintained at least ten years ahead (IEA, 2007). Setting
aspirational targets for the very long term (e.g. to 2050),
without providing milestones for this key midterm period, does
not significantly help reduce investment risk. However, simply
defining a policy goal over a ten-year period is not sufficient:
credibility that the policy will not be changed over this period is
also important (ibid).
Good quality and detailed data
Setting targets and standards should be informed by energy
efficiency potentials within each sector. However, in the absence
of good quality and detailed data, it is difficult to estimate, with
sufficient precision, current and projected emissions, mitigation/
improvement potentials and costs, and, therefore, it is difficult to
set targets that will deviate significantly from business-as-usual
emissions.
In addition, policy makers need to establish clear rules, and
give companies the confidence that these rules will be applied
consistently over a long period.
Message 5: Although the use of aggregated-level data can
be challenging in setting ambitious differentiated targets, the
inability to improve on this data immediately should not be
a reason for delaying action. At the start of a scheme, policy
makers need to ensure that the data collection requirements
Phases 1 and 2 of the EU emissions trading scheme (ETS)
illustrate this point, where a lack of industry data prior to Phase
1, and associated information asymmetries, partly explained the
over-allocation of allowances and the corresponding low price of
European allowances (EUAs). The same could occur in Phase 1
of India’s PAT scheme, because the government is initially using
31 Due to the diversity within subsectors in India, such as scale of production
(installed capacities), use of raw material, process technology, vintage, operation
and management practices, and type of product output.
36
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
become more detailed through time. As governments become
capable of collecting granular process-level data, targets can
be fine-tuned over time to ensure ambitious efforts while
maintaining the visibility of prices, policy decisions, and the rules
of the scheme to provide long-term certainty for investors.
TABLE 4: Examples of supporting measures addressing specific barriers
Country
Example of
Supporting
measure
Possible barrier addressed
Rationale
China
Differential
energy pricing for
industry
Signal of market energy prices not
effective in driving energy savings/
environmental externalities not
taken into account.
Less efficient plants are faced with higher
electricity prices to stimulate efficiency
improvement or, alternatively, to close down
due to prohibitively high electricity costs.
India
Mandatory
industrial energy
management
Lack of information. Decisionmaking regarding energy efficiency
is dispersed among different actors
within a company.
India’s sectors are very diverse. Even within
a specific subsector, (e.g. steel or cement
production), energy performance varies widely.
It has, therefore, been technically and politically
difficult to regulate. It has, to date, been easier
to mandate a process than an outcome.
Japan
Emissions credit
scheme for SMEs
Limited opportunities to reduce
emissions inside the firm (high
abatement costs) or perceived
industry attitudes to that effect.
Credits from scheme can be used to meet
targets under the Kaidanren action plan. This
arrangement provides participants in the
voluntary scheme with greater flexibility to
comply with their targets under the Voluntary
Action Plan.
Netherlands
Energy
Investment
Deduction
Scheme
High costs
Industrial energy efficiency in the Netherlands
has been high on the agenda for a long time,
and many cheap improvement options have
already been taken. This tax relief programme
makes companies more able to afford energy
efficient technologies to further improve
efficiency.
United
Kingdom
Climate Change
Levy
Signal of market energy prices not
effective in driving energy savings
in industry.
Similar to the Netherlands above.
United
States
ENERGY STAR
Program for
Industry
Limited access to information
(both target group and
consumers), bounded rationality,
relatively efficient performers have
no means to communicate this.
The program gives a range of guidance and
support tools to companies to assist them
in improving their energy performance and
provides recognition opportunities to highlight
industrial companies’ energy efficiency efforts.
37
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
The role of supporting measures
Information policies are complementary to virtually all other
policies (Gunningham and Sinclair, 1999) and can assist the
implementation of other policies in variety of ways. Information
provided by the regulator to industry may encourage compliance
and best practice.
Supporting measures for effort-defining policies
As indicated in Country analyses section above, the policy
packages of the countries surveyed are diverse. The analysis
indicates that effort-defining policies on their own are not able
to achieve stated goals and that a range of supporting measures
(in the form of either carrots or sticks) tailored to the specific
country and industry characteristics is needed to encourage
action.
Information provisions under voluntary agreements designed to
create accountability and transparency generate independent
performance information and increase trust that the scheme is
robust. In the UK’s Climate Change Agreements, the reporting
required to sector associations is an essential part of its
credibility. In the case of tradable permits and other economic
instruments, information about emissions reduction action will
ensure that industry can make rational economic decisions.
For example, firms are better able to estimate the impact that
a carbon price might have on their business by having a list of
costed energy efficiency projects (Crittenden et al., 2011).
An optimal set of supporting measures to underpin effortdefining policies depends on a range of factors including: the
barriers specific to the country and the industry; their interaction
with effort-defining policies and with each other; and the
country’s cultural and political characteristics. Although the
cultural and political factors are not fully examined in this paper,
they are important considerations. Cultural and political traits
that play a role include acceptability of regulation, the level
of cooperation between different stakeholders, governance
arrangements, and attitudes towards the environment and
resource use.
Incentives and subsidies, such as accelerated depreciation
and soft loans, are likely to be a good match with mandatory
effort-defining policies, such as emissions trading schemes
and standards, although free riding32 can be a significant
issue. A combination of standards and technical subsidies are
a case of mutually reinforcing policies. In China, companies
that save energy above a certain threshold are rewarded, and,
independently, they receive incentives for when they invest in the
10 Key Projects (Technical Rewards for Energy-Saving Technical
Retrofits), which supports performance beyond the minimum
energy performance standards (MEPS). The Enhanced Capital
Allowance Scheme in the United Kingdom and the Energy
Investment Deduction Scheme are complementary to the EU
ETS.
Supporting measures are needed to address specific barriers to energy efficiency
Although effort-defining policies set and define energy
conservation and emissions reduction goals for the industry
sector, subsectors or across sectors, supporting measures
generally address specific barriers, where barriers exist. The
characteristics of the policy should match the specific barriers
identified (Table 4). Table 4 provides an example of a supporting
measure that addresses a specific barrier from each of the
countries surveyed. Note this is an illustration, not an exhaustive
list, and further research is needed to claim that such barriers
exist.
Message 6: Where barriers to energy savings have been
identified, supporting measures (in the form of carrots or
sticks) are often needed to support effort-defining policies and
encourage action. The choice and design of these supporting
measures depend on the specific barriers of the country and
sector, their interaction with other policies, and the political and
cultural characteristics of the country in which the supporting
measures are being developed.
Consistency within the policy package
Although the task of teasing out all relationships between different
types of effort-defining policies and supporting measures may
be impractical and context-specific, we can distinguish some
general interactions where the policy interaction can be mutually
reinforcing or counterproductive. The following interactions, both
positive and negative, can be observed.
32 In this context, free riding refers to a circumstance whereby a company may
make use of a subsidy or financial incentive (i.e. a public good) to help it finance
an energy efficient project or technology, but that company would have made that
investment anyway (without the use of the incentive).
38
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Energy management programmes as part of a wider policy
or programme
EnMS standards and similar requirements can be effective
as stand-alone initiatives, but are more important for their
enhancement of higher-level effort-defining policies such as
energy savings agreements between industrial enterprises and
government.
Programmes to promote Energy Management Systems (EnMS)
and similar energy management requirements have been shown
to be particularly effective as supportive measures of broader
effort-defining policies. Such programmes usually specify how
energy management should be carried out, for example, through
standardised methods such as the upcoming international ISO
50001 or the European EN 16001 standards, or through other
requirements such as the Netherlands’ energy management
specifications under the LTAs.
In European countries (Sweden, Denmark and Ireland, with some
discussion of the Netherlands and the United States reviewed
in a separate IIP paper33), EnMS requirements are a core,
mandatory part of the broader energy conservation agreement
packages between governments and industrial enterprises.
Enterprises participate in the broader energy conservation
agreements to receive the tax benefits, technical support and/
or reputational benefits that these agreements bring. Providing
training on the EnMS as well as case studies is also a key to drive
successful implementation of EnMS. Promoted this way, the
results, in terms of enterprise uptake of EnMS, are exceptionally
good, typically making savings of 10-20% within the first five
years.
EnMS enable organisations to establish systems and
processes necessary to achieve operational control and
continual improvement of energy performance (O’Sullivan,
2011). Implementation of an EnMS assists a company to
develop a baseline of energy use, actively manage energy
use and costs (in particular as energy prices are becoming
increasingly volatile), reduce emissions without a negative
effect on operation, and continue to improve energy use/
product output over time (Scheihing, 2009). EnMS help
companies more easily implement and meet the obligations
of a range of (usually) effort-defining policies, and facilitate
trade in markets that are demanding more traceability, quality
and environmental credentials from their suppliers. Companies
that have implemented EnMS standards have often achieved
savings beyond the expectation of effort-defining policies, and
typically making savings of 10-20% within the first five years.
In addition, a common experience of companies that use EnMS
effectively is that many other significant nonenergy benefits are
also uncovered (such as productivity, nonenergy operating costs,
equipment life, maintenance costs, waste generation) (Hall and
Roth, 2003).
Message 7: Energy management programmes, if cohesively
linked to effort-defining policies and supported by training
and incentives, can be very effective as supporting measures.
Experience in European countries has shown that such
programmes can usefully contribute to enhanced energy-savings
performance, facilitate company achievement of effort-defining
policies and ease the burden of compliance checks on the
government.
Implementation toolbox
As well as ensuring a country has an ambitious effort-defining
policy in place with supporting measures that address specific
barriers and are mutually reinforcing, an implementation toolbox
is a key element for ensuring an effective policy package. The
implementation toolbox may be either developed within the
regulations of an effort-defining policy or a supporting measure,
or may underpin them as separate tools.
EnMS standards and programmes to promote EnMS can benefit:
Companies by uncovering energy-savings opportunities,
facilitating their achievement of effort-defining policies and
by taking advantage of governmental incentives (in the form
of financial incentives, training or technical assistance), where
these measures have been built into the programme; and
ll These tools are the instruments that assist the target group in
meeting the requirements of the policy effectively and efficiently.
The tools may be definitions, standardised methods, lists of
eligible technologies or practices, information on options for
Government by easing the burden of compliance checks
and supervision, in addition to increasing companies’
implementation success of effort-defining polices, such as
negotiated agreements and targets.
ll 33 Goldberg, A., Reinaud, J., & Taylor, R.P. (2011). Promotion Systems and
Incentives for Adoption of Energy Management Systems in Industry: Some International Lessons Learned Relevant for China (June 2011). Retrieved from http://
www.iipnetwork.org/publications#energymanchina.
39
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
supporting measures and an implementation toolbox to facilitate
the implementation of both policies and measures. In some
cases, tools and guidelines can be developed first and can then
form part of the implementation toolbox once policies and
measures have been established.
meeting obligations, or guidelines for how to monitor and report
data; the tools should specify the target group, entities, roles,
responsibilities, rules, monitoring, penalties, policy assessment
indicators and the policy evaluation cycle.
The Netherlands, Japan, the United Kingdom and the United
States have relatively elaborate toolboxes, with well-defined
rules and modalities, and guidance documents. In the
United States, the Department of Energy (DOE)’s Industrial
Assessment Centers (IACs) help companies to perform indepth evaluations of potential savings from energy efficiency
improvements. The DOE's Industrial Technologies Program
also provides trained energy experts to perform Energy Savings
Assessments at the most energy-intensive manufacturing
facilities (Levine et al., 2010).
Monitoring, reporting and verification; compliance and
enforcement
Not all policies have monitoring, reporting and verification (MRV)
regimes, yet MRV is an essential part of policy making. MRV
measures energy efficiency actions, ensures that firms adhere
to the requirements of the policy, keeps accurate records of
compliance and allows a cost-benefit analysis of the policy to be
undertaken. Without systemwide measurement, it is impossible
to know what is being achieved or whether the programme is
successful (OECD/IEA, 2010).
In other cases, policies have been defined without the necessary
support of an implementation toolbox. China’s energy auditing
obligations under the Top-1 000 Program are an example where
energy auditing became mandatory but no protocols defining
energy auditing processes were developed. The Lawrence
Berkeley National Laboratory (LBNL) notes the lack of standards
and guidance for energy auditing and lack of capacity both
within enterprises and within other organizations that perform
energy audits (Levine et al., 2010; Shen et al., 2010).
MRV regimes differ according to the type of policy. In the case of
labelling and standards for example, targeted measurement of
individual product suppliers is needed to monitor which suppliers
are compliant and which are not. In the case of emissions
reduction commitments, MRV obligations under the UNFCCC
have to date focused on quantitative aspects (such as emissions
by source and trade-in emissions credits), but also includes
qualitative aspects (such as reporting on policies and measures,
as well as on national systems for monitoring, tracking of
emissions and quality control) (OECD/IEA, 2008).
Effective and mutually reinforcing results may be achieved more
easily in a case where policies from the three different levels in
the pyramid are designed at the same time than in a case where
existing instruments are “re-used” or developed in a piecemeal
fashion.
Requiring public reporting by target group participants
encourages senior managers to be cognisant of the amount
of energy they could save and their business response and go
beyond one-off audits that identify and implement opportunities
over a finite period (Crittenden et al., 2011). Reporting needs
to be undertaken at regular intervals and using standardised
metrics. External verification provides companies with objective
feedback and builds trust between governments and industry, as
well as public trust in the policy overall.
The implementation toolbox should be clear at the point
of adoption of effort-defining policies or at the point of
implementation at the latest. Clarifying the implementation
toolbox at a later stage will create uncertainty, reduce the
support and delay the implementation of efficiency improvement
measures. In some cases, establishing a set of tools and
guidelines can form part of the implementation toolbox of
policies and measures once these policies and measures are
established.
In most countries, annual monitoring and reporting on achieved
energy efficiency improvements is required, and some type of
standardised protocol is available. However, the provisions for
independent oversight and the role of governments vary greatly.
For example, in Japan, companies report unilaterally. China
and India’s MRV processes are not transparent, although the
role of the Bureau of Energy Efficiency (BEE) and Designated
Message 8: A comprehensive implementation toolbox is
needed to support the implementation and achievement of
effort-defining policies and supporting measures. An ideal
situation is one where a country sets an effort-defining policy,
and simultaneously, or quickly thereafter, develops a set of
40
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
bodies ex-post and are regularly evaluated ex-ante.
Energy Auditors (DENA) in the MRV requirements of India’s
PAT scheme will improve accountability and transparency.
Independent verification is not required in many countries,
making it hard to provide a solid assessment of the actual energy
efficiency improvements achieved.
In the other countries, this evaluation is done to a limited
extent. Even if the effectiveness of a policy is assessed, often
only the trend of the affected driver is tracked (e.g. total energy
consumption, energy efficiency, and total emissions), not the
extent to which the observed trend is attributable to the policy
versus to other circumstances.
Enforcement is an issue in some countries and consequences
of noncompliance can be limited. For instance, in the United
States, most effort-defining policies lack enforcement and have
no penalty setting. Regular compliance checks and enforcement
with penalties will increase the incentives of companies to
maintain up-to-date information on energy efficiency best
practice.
Free riding is also an important consideration when evaluating
policies. Free riding can be a problem, particularly in incentives
and subsidy programmes, where participants benefit from the
programme but would have purchased more efficient equipment
even in its absence. Regular updates and phasing out of tax
incentives for technologies and products that become wellknown and have good market penetration can help reduce free
riding (IEA, 2010).
Message 9: A transparent monitoring, reporting and verification
process is needed to assess the effectiveness of the policy, allow
ongoing evaluation and possible adjustment of the policy, and
build trust.
The efficiency of policies (the cost-benefit analysis of the policy)
is addressed even less frequently than policy effectiveness.
This is an important limiting factor in improving existing policy
instruments or considering whether alternatives could achieve
the same results at lower costs to society and the target group.
Ex-post evaluation
A quantitative evaluation of policy effectiveness and efficiency
is absent in many countries, other than the Netherlands and the
United Kingdom. This absence makes it difficult to determine
whether changes are needed to improve the impact of the policy
or policy package, and which changes should be made.
Message 10: As policy makers define policies, governments
need to identify, from the start, the parameters and indicators
that will be monitored to allow ongoing and ex-post evaluations.
Policy efficiency and free riding should be assessed, in addition
to effectiveness, in ex-post policy evaluation to ensure that the
policy is achieving the desired goals at lowest costs to society
and the target group.
Only the Netherlands and the United Kingdom have developed
something of a “tradition” in ex-post policy evaluations,
regarding the assessment of target achievement, effectiveness
and efficiency of industrial energy efficiency and GHG policies.
Major policies are have occasionally been evaluated individually
by their implementing bodies or general government oversight
41
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Conclusions
This paper analyses the policy packages of China, India, Japan,
the Netherlands, the United Kingdom and the United States to
identify best practices and lessons learned across countries in
the development of energy efficiency and GHG policies. Using
the “policy pyramid” methodology described in this paper, the
paper explores whether the effort-defining policies, supporting
measures and the implementation toolbox of these countries
can provide the necessary impetus to achieve ambitious energy
efficiency levels.
United Kingdom, supported by a levy or tax in case of
nonparticipation or noncompliance, energy management
guidance to help achieve stated goals, and financial
incentives;
The concept of benchmarking (comparing one’s business
performance to that of peers) to define energy efficiency
targets among companies, used in the Dutch negotiated
agreements and Phase 3 of the EU ETS, and now being
developed in India and Japan;
ll In the industry sector, considerable and diverse barriers to
energy efficiency investments still prevent the full potential to
realise energy savings and emissions reductions. “Best practice
policies” and the effectiveness of the policy package in achieving
ambitious energy efficiency levels are dependent on a range of
factors specific to the context: the specific barriers and drivers
within a country and sector, how much effort has already been
spent on energy efficiency improvements in the past, and a
country’s cultural and political traits.
A well-developed implementation toolbox, as in Japan, the
United States, the United Kingdom and the Netherlands to
help companies understand the challenges and opportunities
available to them to manage and reduce energy use and GHG
emissions; and
ll India’s Perform Achieve Trade scheme, an energy-savings
trading (i.e. white certificates) scheme between energyintensive enterprises, and the first scheme of its kind for
industry.
ll Notwithstanding these context-specific factors, the policy
pyramid is a means by which to analyse the policy approaches
of different countries, and to assess whether certain minimum
elements critical to the success of a policy package have been
considered. An effective policy approach requires a policy
package consisting of ambitious effort-defining policies to
define energy efficiency and GHG reduction goals, supporting
measures (either as carrots or sticks) that address the different
barriers and encourage performance, and an implementation
toolbox to support the implementation of effort-defining policies
and supporting measures (illustrated in the policy pyramid in
Figure 1). When the goal or effort required is not defined, the
effectiveness of all policies, both effort-defining policies and
supporting measures, is compromised.
Key Messages
The paper provides the following recommendations on how
to design effective policies and policy packages and how to
evaluate the effectiveness of existing policy packages:
Message 1: As governments define their policy package to
support their energy efficiency and climate mitigation goals, they
need to start by defining the overall energy efficiency or emission
reduction ambition levels through an effort-defining policy. As
such, what matters is not the quantity of effort-defining policies
but their quality and scope.
Message 2: Mandatory targets, such as cap-and-trade and
white certificates schemes, negotiated agreements (when
these are supported by rewards for participation or the threat
of regulation), and industrial product/process standards can be
viable effort-defining policies to encourage energy savings and
GHG reductions.
The analysis of the policy packages has also enabled us to
highlight certain experiences that could be of interest to other
countries. These experiences include:
China’s minimum energy efficiency standards for industrial
processes and energy efficiency appraisals for new large
industrial projects;
ll Message 3: As effort-defining policies, targets and standards
can be effective in combination with each other provided
The negotiated agreements in the Netherlands and the
ll 42
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Message 7: Energy management programmes, if cohesively
linked to effort-defining policies and supported by training
and incentives, can be very effective as supporting measures.
Experience in European countries has shown that such
programmes can usefully contribute to enhanced energy savings
performance, facilitate company achievement of effort-defining
policies and ease the burden of compliance checks on the
government.
that they differ in scope (e.g. according to system boundary,
participant definition, sectoral scope, primary objective etc.).
In a combined application of targets and standards, minimum
efficiency standards would work on the bottom-end of the
market (in terms of efficiency) to establish a floor, while targets
can go beyond these actions and aim for higher ambition levels.
Message 4: To define ambitious energy efficiency or GHG
goals, governments, industry representatives and third-party
experts should be involved in the design and negotiation process.
Experience has shown that the hiring of third-party sector
experts allows governments to negotiate more ambitious targets
than would otherwise have been the case. A consultative process
can also support more ambitious targets.
Message 8: A comprehensive implementation toolbox is
needed to support the implementation and achievement of
effort-defining policies and supporting measures. An ideal
situation is one where a country sets an effort-defining policy,
and simultaneously, or quickly thereafter, develops a set of
supporting measures and an implementation toolbox to facilitate
the implementation of both policies and measures. In some
cases, tools and guidelines can be developed first and can then
form part of the implementation toolbox once policies and
measures have been established.
Message 5: Although the use of aggregated-level data can
be challenging in setting ambitious differentiated targets, the
inability to improve on this data immediately should not be
a reason for delaying action. At the start of a scheme, policy
makers need to ensure that the data collection requirements
become more detailed through time. As governments become
capable of collecting granular process-level data, targets can
be fine-tuned over time to ensure ambitious efforts while
maintaining the visibility of prices, policy decisions, and the rules
of the scheme to provide long-term certainty for investors.
Message 9: A transparent monitoring, reporting and verification
process is needed to assess the effectiveness of the policy, allow
ongoing evaluation and possible adjustment of the policy, and
build trust.
Message 10: As policy makers define policies, governments
need to identify, from the start, the parameters and indicators
that will be monitored to allow ongoing and ex-post evaluations.
Policy efficiency and free riding should be assessed, in addition
to effectiveness, in ex-post policy evaluation to ensure that the
policy is achieving the desired goals at lowest costs to society
and the target group
Lesson 6: Where barriers to energy savings have been identified,
supporting measures (in the form of carrots or sticks) are often
needed to support effort-defining policies and encourage action.
The choice and design of these supporting measures depend on
the specific barriers of the country and sector, their interaction
with other policies and the political and cultural characteristics
of the country in which the supporting measures are being
developed.
43
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
References
AEA Technology. (2004). Climate change agreements: Results
of the first target period assessment. Version 1.2. Retrieved
from: http://www.decc.gov.uk/assets/decc/what%20we%20
do/global%20climate%20change%20and%20energy/
tackling%20climate%20change/ccas/caa_analysis/cca-aug04.
pdf.
systems in industry: Some international lessons learned relevant
for China (June 2011). Retrieved from: http://www.iipnetwork.
org/publications#energymanchina.
Gunningham, N., & Sinclair, D. (1999). Regulatory pluralism:
Designing policy mixes for environmental protection. Law &
Policy, Vol. 21, No. 1.
Anderson, S. T., & Newell, R. G. (2004). Information programs
for technology adoption: the case of energy-efficiency audits.
Resource and Energy Economics, 26, 27–50.
Hall, N., & Roth, J. (2003). Non-energy benefits from commercial
and industrial energy efficiency programs: Energy efficiency may
not be the best story. Energy Program Evaluation Conference,
Seattle.
Balachandra, P., Ravindranath, D., & Ravindranath, N. H. (2010).
Energy efficiency in India: Assessing the policy regimes and their
impacts. Energy Policy, 6428–6438.
Harmelink, M., Nilson, L., & Harmsen, R. (2008). Theory-based
policy evaluation of 20 energy efficiency instruments energy
efficiency. Energy Efficiency, 1,131–148.
Bhattacharya, S. & Cropper, M. L. (2010). Options for energy
efficiency in India and barriers to their adoption: Resources for the
future. Washington,.
CAN Japan. (2008). Japan at a glance, CAN Japan, November
2008.
Harmelink, MGM., Graus, W., Marsidi, M., Saygin, D., & Worrell,
E. (2010). Potential for savings and energy efficiency in the
Netherlands. Utrecht University, Ecofys, Harmelink consulting,
Utrecht.
CE/Vrom Inspectie. (2010). Energy in licensing and enforcement
(Equivalent Alternative implementation by municipalities) (in
Dutch). June 2010.
IEA. (2007). Climate policy uncertainty and investment risk.
Retrieved from: http://www.iea.org/textbase/nppdf/free/2007/
Climate_Policy_Uncertainty.pdf.
Crittenden, P., Lewis, H., & Vickery, L. (2011). Supporting
measure to accelerate the uptake of energy efficiency in industry:
Linking mandatory assessments, education and training with
carbon pricing.
IEA. (2008). Energy policies of IEA countries: 2008 Japan
Review. OECD/IEA, Paris.
IEA. (2009). Energy technology transitions for industry:
Strategies for the next industrial revolution. Available at http://
www.iea.org/publications/free_new_Desc.asp?PUBS_ID=2104.
de Beer, J., et al. (2000). Effectiveness of energy subsidies.
Research into the effectiveness of subsidies and fiscal incentives
over the period 1988-1999. Ecofys, Erasmus University
Rotterdam, Free University Amsterdam, December 2000.
IEA. (2010). Briefing note for IEA Workshop. November 22nd23rd 2010. Tax incentives for energy efficiency in transport
and industry. Retrieved from: http://www.iea.org/work/
workshopdetail.asp?WS_ID=490.
de Groot, H., Verhoef, E., & Nijkamp, P. (2001). Energy saving by
firms: Decision-making, barriers and policies. Energy Economics,
23, 717–740.
IPCC. (2001). Mitigation: A report of working group III of the
Intergovernmental Panel on Climate Change. IPCC Working
Group III.
Dhingra. (2011). The perform achieve trade mechanisms. Paper
presented to the 2011 ECEEE Summer Study.
IPCC. (2007). Mitigation (industry chapter). Fourth Assessment
Report: A report of working group III of the Intergovernmental
Panel on Climate Change. IPCC Working Group III.
Goldberg, A., Reinaud, J., & Taylor, R.P. (2011). Promotion
systems and incentives for adoption of energy management
44
Institute for Industrial Productivity
Ten Key Messages for Effective Policy Packages. Sharing best practices in industrial energy efficiency policies
Levine, M.D., Price, L., Zhou, N., Fridley, D., Aden, N., Lu,
H., McNeil, M., Zheng, N., Qin, Y., & Yowargana, P. (2010).
Assessment of China’s energy-saving and emission-reduction
accomplishments and opportunities during the 11th Five-Year
Plan. Berkeley, CA: Lawrence Berkeley National Laboratory
(LBNL-3385E). Retrieved from: http://china.lbl.gov/sites/china.
lbl.gov/files/LBNL-3385E.Ace_Study_Report_FINAL.Rev_.pdf.
efficiency or greenhouse gas emissions reductions target-setting
programs. LBNL. February.
Price, L., Levine, M. D., Price, L., Zhou, N., Fridley, D., Aden, N.,
Lu, H., McNeil, M., Zheng, N., Qin, Y., & Yowargana, P. (2011).
“Assessment of China’s energy-saving and emission-reduction
accomplishments and opportunities during the 11th FiveYear Plan.” Energy Policy. Retrieved from http://china.lbl.gov/
publications/assessment-energy-saving-accomplishments-andopportunities-in-China.
Masselink, D. J. (2008). Barriers to investments in energy-saving
technologies case study for the industry. ECN-E--08-057.
MOF. (2010). The notice on interim management regulations
on financial rewards of energy performance contracting
projects. June 3, 2010. Retrieved from: http://jjs.mof.gov.cn/
zhengwuxinxi/zhengcefagui/201006/t20100609_321884.
html.
Rohdina, P., Thollandera, P., & Solding, P. (2007). Barriers to
and drivers for energy efficiency in the Swedish foundry industry.
Energy Policy, 35, 672–677.
Scheihing, P. (2009). Energy management standards (webcast).
US Department of Energy.
NDRC. (2010). Supplemental notice on energy performance
contracting fiscal reward. October 19, 2010. Retrieved
from: http://www.sdpc.gov.cn/zcfb/zcfbtz/2010tz/
t20101022_376434.htm.
Shen, B., Price, L. & Lu, H. (2010). Energy audit practices in
China: National and local experiences and issues. Lawrence
Berkeley National Laboratory, China Energy Group, Energy
Analysis Department, Environmental Energy Technologies
Division. December. Berkeley, CA. Retrieved from: http://china.
lbl.gov/sites/china.lbl.gov/files/Report_on_China_Energy_Audit_
Practices_(EN).pdf
OECD/IEA. (2008). Measurement, reporting and verification
of mitigation actions and commitments. November 2008.
By Jane Ellis (OECD), & Kate Larsen (IEA). Retrieved
from: http://www.oecd.org/document/50/0,3746,
en_2649_34361_42546674_1_1_1_1,00.html.
Sorrell, S., Schleich, J., Scott, S. O'Malley, E., Trace, F., &Boede,
U. et al. (2000). Reducing barriers to energy efficiency in public
and private organizations. Rep. No. JOS3CT970022. SPRU.
OECD/IEA. (2010). Monitoring, verification and enforcement:
Improving compliance within equipment energy efficiency
programmes. Retrieved from: http://www.iea.org/papers/
pathways/monitoring.pdf.
Tanaka, K. (unpublished, 2009). Energy efficiency policies and
measures for industry with case study of energy management
best practices. IEA.
O’Sullivan, J. (2011). Energy efficiency in industry, a holistic and
integrated strategy from policy to results. Paper presented to the
ECEEE Summer Study, June 2011.
Thapliyal, B. P, Mathur, R.M., & Garnaik, S. (2011). Perform
Achieve & Trade (PAT): A market-based mechanism for energy
efficiency in pulp & paper mills. http:// www.ipptaonline.org/
Presentation%20AGM-2011/9.pptx.
Phylipsen, G. J. M., Bode, J. W., Gilbert, A., & Voogt, M. (2005).
Evaluation of national allocation plans for the EU emissions
trading system Phase I. Ecofys, UK. London. Commissioned by
the UK Department of Trade and Industry.
UNIDO. (2010). Industrial energy efficiency benchmarking report.
Retrieved from: http://www.unido.org/fileadmin/user_media/
Services/Energy_and_Climate_Change/Energy_Efficiency/
Benchmarking_%20Energy_%20Policy_Tool.pdf.
Phylipsen, G. J. M., & Ratmann, M. (2007). Evaluation of national
allocation plans for the EU emissions trading system Phase II.
Ecofys , Utrecht. Commissioned by Econcern.
Xinhua. (2010). China orders compulsory energy-saving
assessments of new fixed asset investments. 14 September
2010. Retrieved from: http://business.globaltimes.cn/chinaeconomy/2011-04/576312.html.
Price, L., Glatinsky, C., & Kramer, K. L. (2008). International
experience with key program elements of industrial energy
45
Sharing best practices for the low carbon future | iipnetwork.org
2200 Pennsylvania Avenue, N.W., 4th Floor, East Tower, Washington, D.C. 20037 U.S.A.
[email protected] | Twitter.com/iipnetwork